The Whispir Ltd (ASX: WSP) share price has started the week deep in the red.
In morning trade, the communications workflow platform provider's shares are down 10% to $1.10.
Why is the Whispir share price sinking?
Broad weakness in the tech sector appears to have offset the release of the company's reasonably solid quarterly update this morning and weighed heavily on the Whispir share price.
In respect to its update, for the three months ended 30 June, Whispir reported a 25.9% increase in cash receipts over the prior corresponding period to $16.96 million.
And while the company is not yet profitable, it has made an improvement with its cash outflows. During the period, Whispir reduced its free cash outflow by 15.8% over the prior quarter to $4.74 million thanks to its cost management program.
This left Whispir with a cash position of $26.1 million at the end of June, which management notes is sufficient to cover more than 12 months of cash burn in FY 2023. Though, it may not need it. Management believes that it will achieve positive EBITDA during second half of FY 2023.
What were the drivers of its growth?
According to the release, Whispir now has over 1,000 customers using its communications platform. All regions showed growth during the quarter, with North America the stand-out with a 16.7% increase over the prior quarter.
Another positive was its customer revenue retention (CRR) which came in at 125.5% in June. This was an improvement of 8.4% versus the prior corresponding period. Customer churn remains under 5%.
FY 2022 guidance
Whispir also provided the market with an idea of what to expect with its full-year results next week.
It advised that it expects to exceed the upper end of its revenue guidance range of $64 million to $68 million by up to 5%.
Management also revealed that it expects to exceed the upper end (the good end) of its EBITDA loss range by up to 10%.
One small disappointment, though, is that its annual recurring revenue (ARR) is only expected to be at the lower end of its $65.4 million to $70 million guidance range.
Whispir's CEO, Jeromy Wells, commented:
Whispir continues to sign new customers, expand its offering to existing customers, and find new markets and applications for its communications platform. With a robust cash position and a clear strategy for its three main geographical markets, the Company is well placed to achieve its goals of profitable operations during the second half of FY23 and becoming cash accretive during FY24.
